In situ formation of polymer nanofibrils during compounding with a second polymer followed by their immediate solidification due to shear induced crystallization for two pairs of polymers is described. Sustainable green biopolymer–biopolymer nanocomposites of polylactide (PLA) were then fabricated based on two copolyesters forming nanofibrils during shearing: poly(butylene adipate-co-succinate-co-glutarate-co-terephthalate) (PBASGT) and poly(butylene adipate-co-terephthalate) (PBAT). The shear induced crystallization allowed solidification of PBASGT or PBAT nanofibers immediately under applying a high shear rate without subsequent cooling. The melt memory unveiling as a self-nucleation facilitated shear-induced crystallization. Formation of nanofibril-matrix morphology led to an exceptional combination of strength, modulus and ductility. In situ SEM observation of the tensile test revealed crazing as a dominant mechanism for PLA deformation. However, addition of PBASGT or PBAT resulted in intensified crazing followed by shear banding. Increase of PBASGT or PBAT concentration promoted the brittle-to-ductile transition of the PLA matrix. At the same time, PBAT or PBASGT nanofibers span PLA craze surfaces and at large strain, when PLA craze tufts get broken, they bridge the craze gaps resulting in an increase of both strength and plasticity of PLA.